When the Justice Department on Friday formally dropped its four-year-old case against two former pro-Israel lobbyists for allegedly conspiring to violate the 1917 Espionage Act, prosecutors cited several reasons for their decision but did not provide details.

Some details from the point of view of the defendants, Steven J. Rosen and Keith Weissman, can be gleaned from a March 27 letter to Attorney General Eric H. Holder Jr., asking the Obama administration to review the case. That was written by the pair’s lead defense attorneys, Abbe David Lowell, John N. Nassikas III and Baruch Weiss.

The two lobbyists had been charged in August 2005 with conspiring between 1999 and 2004 to disclose national defense information to people not authorized to receive it — the first time that civilian, non-government employees had been prosecuted under the then-88-year-old act. The case had broad implications, because the same charges technically could be applied to academics, think tank analysts and journalists who seek and receive security information in conversations every day.

The government and the defendants filed many motions to determine what the law required for a finding of guilt and to clarify rules for presenting evidence and witnesses at trial. U.S. District Judge T.S. Ellis III presided over 40 hearings on the matter, and he delivered 12 published decisions. Seven separate trial dates were set and postponed during the past 3 1/2 years before the date of June 2 was established.

Prosecutors and investigators had used FBI wiretaps to pursue Rosen and Weissman for at least five years. The two were charged in 2005 with conspiring to obtain classified information and pass it to the Israeli government and journalists from The Washington Post and other news organizations. The first reason prosecutors gave on Friday for ending the case was the likelihood that classified information would be revealed and concern about “damage to the national security that might result.”

The defense attorneys wrote that Ellis’s rulings permitted them to introduce “a good deal of classified material.” But the classified documents they planned to use would show that the information orally passed to the defendants was similar to, but only part of, more sensitive classified information.

The lawyers said it was “ironic” that to prove “the sanctity of alleged national defense information, the prosecution will risk the disclosure of classified documents . . . the defendants never saw.”

The second reason prosecutors gave for ending the case was a question of whether the government would prevail at trial.

The defendants’ attorneys wrote that they would show that the information relayed to their clients was not classified defense information but material already in the public domain and “not potentially damaging to national security.”

To demonstrate that, the lawyers wrote that two of the government officials who prosecutors said passed classified information to the defendants “have told both us and/or government investigators, that they were authorized to speak with our clients and knew full well (and even intended) that our clients pass the information on to others.”

In addition, the lawyers said that Rosen and Weissman were under government surveillance, including telephone wiretaps, for five years, from 1999 to 2004, yet over that time nothing was done to stop them. Eventually, according to the lawyers, Lawrence Franklin, a Defense Department Iran expert who himself was under investigation for leaking information, was turned into a cooperating informant.

Franklin, wearing a recording device, met with Weissman and “induced him into believing that he had to communicate certain information right away in order to save innocent lives,” according to the lawyers.

The defense lawyers also said they had experts, including two former directors of the Information Security Oversight Office, which is responsible to the president for policy and oversight of the government-wide security classification system. The government had unsuccessfully sought to bar the testimony of J. William Leonard, the most recent former director.

Along with that of other experts, Leonard’s testimony would “establish that the information was innocuous and that the defendants had every reason to believe that their conduct was innocent,” the lawyers wrote. That was important because Ellis had ruled that the government would have to prove that Rosen and Weissman “disclosed the information knowing that their conduct was illegal, knowing the information was closely held, and knowing that the information was potentially damaging to national security,” according to the lawyers’ letter.

KBR, the Army’s largest contractor in Iraq and Afghanistan, is linked to “the vast majority” of suspected combat-zone fraud cases that have been referred to investigators, as well as a majority of the $13 billion in “questioned” or “unsupported” costs, the Pentagon’s top auditor said yesterday. In testimony before the bipartisan Commission on Wartime Contracting in Iraq and Afghanistan, April G. Stephenson, director of the Defense Contract Audit Agency, said investigators have sent to the inspector general a total of 32 cases of suspected overbilling, bribery and other violations since 2004. “I don’t think we’re aware of a program, contract or contractor that has had this number of suspensions or referrals,” Stephenson said.

KBR’s work accounts for 43 percent of the Pentagon’s audited Iraq contracting dollars, according to the agency’s data. Stephenson’s disclosures come as the Pentagon prepares to draw down forces in Iraq, requiring major support from contractors, while ramping up reconstruction efforts in Afghanistan. Lawmakers are pushing the government to introduce more competition in its procurement programs.

Asked for comment, KBR spokeswoman Heather Browne said in an e-mail that KBR, then a subsidiary of Halliburton, was awarded the opportunity in 2001 to perform the Army’s war-zone logistics work “following a competitive bidding process.” The value of that work is now more than $31 billion. She said the firm “in no way condones or tolerates illegal or unethical behavior.”

President Obama has made contract reform a top priority. Shortly after taking office, he vowed to end no-bid contracts that he said “have wasted billions” of dollars in Iraq. The hearing focused on contracts for logistics in war zones, which involves housing and feeding troops, washing their clothes, providing their recreation. Costs soared to $5.7 billion in 2008 from $55 million in 2001. While KBR won the 2001 logistics contract in a competitive process, all task orders for that work, some worth billions of dollars apiece, were not competitively bid.

Some commission members yesterday said they believed that contributed to overbilling and waste. They wanted to know why the Army had not moved faster to award logistics orders competitively two years after creating a program to do so. “Is part of the problem that, in essence with this one contractor, we’ve basically said, ‘KBR is too big to fail?’ ” asked commissioner Christopher Shays, a former GOP congressman from Connecticut. “Or too important — so we are almost treating it like we treat DOD? It’s too big to fail, so we still fund them?”

Stephenson also revealed that some $553 million in payments have been suspended or blocked because contract officials questioned them or said they were invalid. The payments were run up by KBR in Iraq, said commissioner Charles Tiefer, a contract law professor at the University of Baltimore. The commissioners cited a May 1 letter to Defense Secretary Robert M. Gates from Sens. Claire McCaskill (D-Mo.) and Susan Collins (R-Maine), calling on the Pentagon to do more to recover more than $100 million in overcharges and excessive profits associate with KBR employees suspected of fraud. A large portion of the Logistics Civil Augmentation Program, called Logcap, consists of subcontracting.

Last week, Stephenson’s agency issued a report that found the internal controls of KBR’s purchasing system to be inadequate. Defense Contract Management Agency Director Charlie E. Williams Jr. said that finding will be taken into account as the Pentagon makes awards under its new logistics contract program, called Logcap 4.

To ensure the government gets the best price for the service, the Pentagon chose three contractors who may compete for Logcap 4 business. They are DynCorp International, Fluor and KBR. “In terms of lessons learned, how did KBR become one of the contractors on Logcap 4?” commission member Linda J. Gustitus asked. Jeffrey Parsons, executive director of U.S. Army Contracting Command, said he was involved in the source selection and was not aware of any inadequate KBR systems.

Former Bush administration officials have launched a behind-the-scenes campaign to urge Justice Department leaders to soften an ethics report criticizing lawyers who blessed harsh detainee interrogation tactics, according to two sources familiar with the efforts.

Representatives for John C. Yoo and Jay S. Bybee, subjects of the ethics probe, have encouraged former Justice Department and White House officials to contact new officials at the department to point out the troubling precedent of imposing sanctions on legal advisers, said the sources, who spoke on the condition of anonymity because the process is not complete.

The effort began in recent weeks, the sources said, and it could not be determined how many former officials had reached out to their new counterparts.

A draft report of more than 200 pages, prepared in January before Bush’s departure, recommends disciplinary action, rather than criminal prosecution, by state bar associations against Yoo and Bybee, former attorneys in the department’s Office of Legal Counsel, for their work in preparing and signing the interrogation memos. State bar associations have the power to suspend a lawyer’s license to practice or impose other penalties.

The memos offered support for waterboarding, slamming prisoners against a flexible wall and other techniques that critics have likened to torture. The documents were drafted between 2002 and 2005.

The investigation, now in its fifth year, could shed new light on the origins of the memos. Investigators rely in part on e-mail exchanges among Justice Department lawyers and attorneys at the CIA who sought advice about the legality of interrogation practices since been abandoned by the Obama administration.

Two of the authors, Bybee, now a federal appeals court judge, and Yoo, now a law professor in California, had a Monday deadline to respond to investigators.

Miguel Estrada, an attorney for Yoo, said, “As a condition of permitting me to represent Professor Yoo in this matter, the Department of Justice required me to sign a confidentiality agreement. As a result of that agreement, there’s nothing I can say.”

Maureen Mahoney, an attorney for Bybee, also cited the confidentiality requirement in declining to comment.

The legal analysis on interrogation prepared by a third former chief of the Office of Legal Counsel, Steven G. Bradbury, also was a subject of the ethics probe. But in an early draft, investigators did not make disciplinary recommendations about Bradbury.

In a separate effort to counterbalance the draft report, Attorney General Michael B. Mukasey and Deputy Attorney General Mark R. Filip wrote a 14-page letter before they left office this year. They described the context surrounding the origins of the memos, written at a time when officials feared another terrorist strike on American soil.

Both Mukasey and Filip were dissatisfied with the quality of the legal analysis in the wide-ranging draft report, sources said. Among other things, the draft report cited passages from a 2004 CIA inspector general’s investigation and cast doubt on the effectiveness of the questioning techniques, which sources characterized as far afield from the narrow legal questions surrounding the lawyers’ activities. The letter from Mukasey and Filip has not been publicly released, but it may emerge when the investigative report is issued.

A person who has spoken with both Mukasey and Filip said yesterday that neither had been solicited to approach new department leaders about the ethics report.

Late Monday, Assistant Attorney General Ronald W. Weich wrote senior congressional Democrats to offer an update about the status of the ethics investigation, which is being conducted by the Justice Department’s Office of Professional Responsibility. Weich told Sens. Richard J. Durbin (D-Ill.) and Sheldon Whitehouse (D-R.I.) that Attorney General Eric H. Holder Jr. and Deputy Attorney General David W. Ogden “will have access to whatever information they need to evaluate the final report and make determinations about appropriate next steps.”

Authorities did not signal in the letter when or in what form the report will be released. The biggest holdup had been that the content of the interrogation memos was classified, but the documents were released last month by the Justice Department. Sources said the highly anticipated report could emerge as soon as this summer.

Mary Patrice Brown, new chief of the Justice Department ethics office, told an audience of lawyers last night that her preference is toward “transparency” and releasing investigative reports on a case-by-case basis, depending on the “severity” of the misconduct and the public’s interest.

Any disciplinary findings about the former Justice lawyers could energize calls within Congress and among left-leaning interest groups for criminal prosecution of Bush administration officials who authorized the interrogations and for an independent congressional inquiry into the origins of the practices.

In an interview yesterday, Durbin said it was too early to call for a special prosecutor or another congressional probe.

But, he said, many important questions remained unanswered. “It’s a question of responsibility. In this chain of command, how far up did it go?”

A recent editorial argued Congress should “butt out and let the Defense Department do its job” in procuring the new generation of Air Force refueling tankers.
Sadly, the problem is the Defense Department has failed for the better part of a decade to “do its job” in getting the American war fighter a modern, efficient, refueling tanker. Its efforts have resulted in a procurement scandal that saw a government official and a high-ranking Boeing executive go to prison for a corrupt lease proposal. In fact, this pillaging of the taxpayer might not have been exposed had U.S. Sen. John McCain not “butted in” and exposed the fraud.
Last year, the Defense Department awarded the tanker contract to the Northrop/EADS team only to later cave in to Boeing’s misinformation campaign and punt the problem to the next administration. So here we are, nearly a decade after the Defense Department began “doing its job,” with no new tankers in the air, or even in production.
Sometimes, congressional intervention is called for. I hope Rep. John Murtha, Sen. Daniel K. Inouye and the Alabama congressional delegation will continue to fight for a split buy.

The Project On Government Oversight ( POGO ), National Taxpayers Union (NTU), Taxpayers for Common Sense (TCS), and U.S. Public Interest Research Group (U.S. PIRG) sent a letter yesterday to the Chairs and Ranking members of the Senate and House Armed Services committees urging them to preserve key provisions to reform and improve the Department of Defense’s (DoD’s) acquisition system.

But while both bills address important principles of reform, the groups believe that the Senate version of the bill implements superior mechanisms to address the challenges confronting DoD.

“The Senate bill incorporates strategies for dealing with the problems we have studied extensively and know exist in the defense procurement process,” said POGO Executive Director Danielle Brian . “But nothing will change if these and existing rules continue to be flaunted by the Pentagon and ignored by the Congress.”

The groups’ letter highlights provisions in the Weapons Acquisition Reform Act of 2009 (S. 454) and the Weapons Acquisition System Reform Through Enhancing Technical Knowledge and Oversight (WASTE TKO) Act of 2009 (H.R. 2101) that would ensure programs have design maturity, elevate independent cost estimates, increase accountability for programs that experience critical cost growth, reduce organizational conflicts of interest, increase competition, and add transparency to the procurement process. Additionally, the groups urged the members of Congress to increase discipline in the procurement process, beginning with upholding the weapons cuts proposed by Defense Secretary Robert Gates.

This legislation is only one of many steps necessary to reform DoD’s procurement system, the groups said. “In order to achieve lasting, meaningful change, the Pentagon must follow the rules and controls in place, and Congress must conduct oversight to make sure that they do so,” said the groups.

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Founded in 1981, the Project On Government Oversight ( POGO ) is an independent nonprofit that investigates and exposes corruption and other misconduct in order to achieve a more effective, accountable, open, and ethical federal government.If you wish to unsubscribe from Project On Government Oversight communication, please write mcowart@pogo.org with UNSUBSCRIBE in the subject line.

The “Good News” for America and the Federal Civil service about 30 years of Lawbreaking at U.S. Office of Special Counsel (OSC) and U.S. Merit Systems Protection Board (MSPB).

By the Civil Service Reform Act of 1978, federal civilian employment is governed by “merit principles, found at 5 U.S.C. §2301. Agency violations of the “merit principles,” termed “prohibited personnel practices (PPP’s), are detailed at §2302(b) and include the whistleblower reprisal type PPP. The legislative scheme to protect federal employees from PPP’s assigns complementary duties to agency heads, OSC and MSPB. Specifically, OSC is the federal law enforcement agency responsible to protect federal employee from PPP’s, by §§1212 and 1214. Agency heads are responsible to “prevent PPP’s” in their agencies by §2302(c). MSPB is responsible to conduct, per §1204(a)(3), the “special studies” necessary to determine and report whether OSC and agency heads are adequately performing their duties in protecting federal employees from PPP’s.

This system is broken and has been for 30 years. Most specifically, by §1214(e), OSC is required to issue a report to the involved agency head when it determines “there is reasonable cause to believe” a violation within its enforcement jurisdiction occurred and the agency head is required to certify his review of OSC’s report and the agency’s response (excepting when OSC has additionally, at its complete discretion, determined the violation is one “which requires corrective action” and reported both determinations per §1214(b)(2)(B)). By §1219(a)(3), these are permanent, publicly available records.

Joe Carson, PE, Chair of the OSC Watch Steering Committee, can personally attest, based on his review of the Annual Reports to Congress OSC has issued since its creation in 1979 and his personal review of its “publicly available” records, that OSC has not made a single §1214(e) report since 1979 – not for its about 50,000 investigations of complaints alleging about 100,000 specific violations of law, rule, or regulation (the large majority PPP’s) within its jurisdiction.

For 30 years, until recently, OSC claimed that the reporting requirements of §1214(e) did not apply to the laws, rules, or regulations within its jurisdiction. It has now apparently abandoned that claim. Additionally, in a May 11, 2009 decision in Carson v. Office of Special Counsel, no. 08-330, Eastern District of Tennessee at Knoxville, Federal Judge Thomas Phillips determined the reporting requirements of §1214(e) do apply to the laws, rules, and regulations within OSC’s jurisdiction (see pages 10-11). There should be thousands of such §1214(e) reports – along with the agency head’s certified response – in OSC’s public reading room and/or website, instead there is nothing, absolutely nothing.

MSPB has yet to conduct a “special study” that considered OSC’s compliance with and performance of its non-discretionary duties to protect federal employees from PPP’s. Mr. Carson can personally attest, based on FOIA responses, that the current Chair of MSPB has no formal opinion as to whether federal employees are adequately protected from PPP’s – and that he contends the purpose of MSPB’s “special studies” is not to provide a basis for such an MSPB determination but to merely inform the opinions of its readers. So agency heads – as the White House and Congress – are largely “in the dark” about whether they are adequately “preventing PPP’s – including whistleblower reprisal” in their agencies.

Because they have not, all too often, federal workplaces allow dysfunction and corruption to take root and flourish. Bottom line, America is both much diminished and more threatened as a result of OSC and MSPB’s 30 year failure to discharge their positive duties to ensure federal employees are protected from PPP’s.

What is the “good news” about that? Given the number of challenges and crises facing America, the exposure of OSC’s and MSPB’s 30 years of lawbreaking is “good news” for at least two reasons:

1) it explains an essential factor to much of what has befallen America in past 30 years, and

2) it can be readily fixed. Congress is considering passing a new law to protect federal employees from the whistleblower reprisal type PPP – and OSC Watch hopes it does so.

But when OSC and MSPB can, for 30 years, not comply with existing law, with apparent impunity, is passing a new law an adequate response? Should not Congress also do the oversight necessary to ensure current law to protect federal employees from PPP’s is being followed at OSC and MSPB?

As you may remember, we fell just short of obtaining whistleblower protection for all federal employees in the stimulus legislation. In my last letter I explained that Americans would need to work together to make meaningful whistleblower protection a reality. Now is your opportunity to join me!I will once again be going to Capitol Hill to testify before Congress. I will be testifying in my personal capacity tomorrow, May 14th, in front of the House Committee on Oversight and Government Reform.
I will be explaining how whistleblower protection is essential to deter contractor fraud and wasteful military spending. The first time I testified before Congress I was stripped of my position in the Army Corp of Engineers’ Senior Executive Service, as the Procurement Executive. However, I am going to testify again. I made this decision because I strongly believe that all employees who report improprieties and waste, fraud, and abuse of taxpayer dollars should be protected from retaliation. I am doing everything I can to persuade Congress that whistleblowers deserve protection, but I cannot do it alone!
Please contact Congress and tell them that true oversight and accountability that this nation and the world needs now cannot exist without protection for all federal employees. I trust that you will pass this letter on to your friends, coworkers, and community groups to let them know that now is the time to act to protect all federal employees.For 30 years, federal agencies have successfully lobbied against protecting federal employee whistleblowers. We need to make sure that they are not successful this time! As President Obama said, “We can do it!”
So please contact President Obama and tell him not to be pushed by the agency bureaucrats who are hostile to change and want to leave federal employees unprotected.Together we can win this fight! Please act now and forward this letter to your friends and family! If you are in the area, you can attend the public hearing tomorrow, May 14th at 10 AM in Rayburn House Office Building Room 2154. Thank you in advance for your support.
Very Truly Yours,
Bunnatine H. GreenhouseFormer Procurement Executive
U.S. Army Corps of Engineers

Former Federal Procurement Executive Will Testify At House Hearing On Federal Employee Whistleblower Protection Washington, D.C. May 13, 2009.

On Thursday May 14th at 10 AM, the House Committee on Oversight and Government Reform will be holding a hearing “Protecting the Public from Waste, Fraud and Abuse: H.R. 1507, the Whistleblower Protection Enhancement Act of 2009.” Bunnatine (“Bunny”) H. Greenhouse, the highest-ranking procurement official in the Army Corp of Engineers to oppose the no-bid, cost-plus contracts to Halliburton for the reconstruction of Iraq will be testifying in her personal capacity in support of the legislation. Ms. Greenhouse, a vocal supporter of whistleblower rights, has written a new letter urging Americans to contact Congress and President Obama. In her letter, Ms. Greenhouse explains that despite being stripped from her position following her first testimony before Congress, she decided to testify again because “all employees who report improprieties and waste, fraud, abuse of taxpayer dollars should be protected from retaliation.”

David K. Colapinto, General Counsel of the National Whistleblowers Center, will also be testifying at the hearing. Mr. Colapinto will be explaining why national security whistleblowers need protection and how they can be protected without jeopardizing national security. Please visit the National Whistleblowers Center website: http://www.whistleblowers.org for a list of hearing witnesses and links to written testimony, transcripts, and a live feed of the hearing.

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